GOLD Technical Analysis 2015, 22.02 - 01.03: Bullish Breakout or Bullish Ranging with 1306.82 Key Resistance - page 2

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newdigital, 2015.02.25 18:33

Gold Ticks Higher on Weak Dollar, Chinese Interest (based on wsj article)

The most actively traded contract, for April delivery, was recently up $9.40, or 0.8%, at $1,206.70 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold inched up from a one-month low as some investors saw a bargain while others returned to the market following Lunar New Year celebrations in China. The country is the world’s second-largest gold buyer after India, but investors there typically stay on the sidelines during the holiday.

A weaker dollar also sent some investors into gold in a bid to protect their wealth. The WSJ Dollar Index was recently down 0.2% at 85.28.

“Gold is acting more as a currency hedge at this point,” said Paul Nolte, a portfolio manager at Kingsview Asset Management in Chicago.


 

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newdigital, 2015.02.26 05:37

Gold trade coming back, if you can wait 2 years (based on cnbc article)

Gold will come under further pressure over the course of the year as the Federal Reserve moves closer to lifting rates, but prospects for the precious metal looks far more promising in the next few years, according to Bank of America Merrill Lynch.

"Right now, investors are not in the mood for holding gold because they see the Fed raising rates. So, I think in the next three months you'll see downside risk, $1,100 an ounce is likely," Francisco Blanch, commodities analyst at Bank of America Merrill Lynch told CNBC.

"But if you look out 2-3 years, things are a lot brighter for gold," he said.

Gold kicked off the year with a bang, rising around 8 percent in January. However, the yellow meal has since erased most of its gains as a stronger dollar – driven by rate hike expectations –and gains in equities dim its appeal. Spot gold last traded around the $1,210 level.

Blanch's positive longer-term outlook for gold is driven by two factors.

First, the growing phenomenon of negative-yielding bonds, which makes gold look attractive in comparison.

"There are a growing number of government bonds basically yielding zero or negative. As the number increases, I think a lot of investors are going to wonder why they are holding a liability as opposed to holding an outright asset like gold," he said.


 

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newdigital, 2015.02.26 16:34

Gold 'Absolutely' A Safe Haven - BMO Analyst

Kitco News speaks with BMO’s Jessica Fung to see how she sees gold and silver set up for the coming year. Based on her research, Fung says she expects U.S. dollar strength, which has hindered upside potential for metals prices, to continue. “In this environment, where we expect the U.S. dollar to continue to strengthen, I think we’re going to maintain a very high gold-to-silver ratio,” she says, adding that this increasing ratio hasn’t allowed silver to keep up with any gold price upswings. Looking to global uncertainty, Fung says gold is ‘absolutely’ a safe-haven. “It always will be and that is what it will take to drive prices higher,” she adds. Tune in now to hear more from BMO’s commodity analyst regarding Federal Reserve rate hikes, the U.S. recovery and more from the BMO Global Metals & Mining Conference.

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newdigital, 2015.02.27 05:19

Why You Should Have a Gold and Silver Seat Belt

Take a quick look at our financial system. Have things really improved since the entire global system almost went down in 2008?

  • Sure there have been “changes” – for example, your bank most likely has a “bail in” provision added to the fine print of your accounts, letting you know that if they go under due to their own mismanagement, you may be forced to help out with some of your hard-earned funds.
  • And try to withdraw a significant amount of money during a financial crisis – odds are you’ll be informed that you can only take out a relatively small amount per week, and oh, by the way “How do you plan to use that withdrawn money?”
  • Money market funds and “savings” accounts now pay virtually no interest, but (so far) that’s at least better than in some European countries, where hapless account holders actually have to pay the bank for the privilege of leaving money in their account.
  • Massive government debt.
  • Underfunded pension plans.
  • Trillions of dollars in artificial derivative trading vehicles created by over-leveraged banks, backstopped by Federal government printing of unlimited amounts of paper money.
  • “Official” statistics which are constantly “revised” a month or so after they have been released to the public.
  • Published inflation rates which don’t include most of the things we use and do on a daily basis. The list goes on and on.

Exchanging some of your “paper promises” (currency) for the physical financial reality of gold and silver on a regular basis makes more than just good business sense. It helps make sure that come what may in your financial life, your “financial insurance policy” will be there to help you out, when, not if, the chickens from so many years of unsound government policies come home to roost. Look toward Argentina, Venezuela, Russia and others as harbingers. Even now, the U.S. inflation rate is arguably several percent higher than the “official” figure. You would do well to pay attention and plan accordingly.


 

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newdigital, 2015.02.27 12:05

Trading the News: U.S. Gross Domestic Product (GDP) (based on dailyfx article)

A marked downward revision in the U.S. growth rate may generate a short-term rebound in EUR/USD should the preliminary 4Q Gross Domestic Product (GDP) report dampen bets for a mid-2015 Fed rate hike.

What’s Expected:


Why Is This Event Important:

Despite bets for higher borrowing-costs, further weakness in the core Personal Consumption Expenditure (PCE), the Fed’s preferred gauge for inflation, may push Chair Janet Yellen to endorse a wait-and-see approach and further delay the normalization cycle as the central bank struggles to achieve the 2% target for price growth.

Nevertheless, the uptick in private wages paired with the ongoing improvement in the labor market may foster a better-than-expected GDP report, and bets for a stronger recovery may heighten the bullish sentiment surrounding the U.S. dollar as the Fed remains on course to remove the zero-interest rate policy (ZIRP) over the near to medium-term.

How To Trade This Event Risk

Bearish USD Trade: Growth Rate Narrows to 2.0% or Lower

  • Need to see green, five-minute candle following the GDP report to consider a long trade on EURUSD
  • If market reaction favors a short dollar trade, buy EURUSD with two separate position
  • Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit; set reasonable limit
Bullish USD Trade: 4Q GDP Report Tops Market Expectations
  • Need red, five-minute candle to favor a short EURUSD trade
  • Implement same setup as the bearish dollar trade, just in reverse
Potential Price Targets For The Release
EUR/USD Daily Chart



  • Break of the triangle/wedge formation favors a continuation of the bearish trend and the approach to ‘sell-bounces’ in EUR/USD.
  • Interim Resistance: 1.1440 (23.6% retracement) to 1.1470 (78.6% expansion)
  • Interim Support: 1.1185 (23.6% expansion) to 1.1210 (61.8% retracement)
Impact that the U.S. GDP report has had on EUR/USD during the last release
Period Data Released Estimate Actual Pips Change
(1 Hour post event )		 Pips Change
(End of Day post event)
3Q P
2014		 11/25/2014 13:30 GMT 3.3% 3.9% +1 +47
The preliminary 3Q U.S. GDP report showed an unexpected upward revision in the growth rate, with the economy expanding an annualized 3.9% amid an initial forecast for a 3.5% clip. Personal Consumption also increased more than initially expected as the figure climbed 2.2% during the same period, while the core Personal Consumption Expenditure (PCE), the Fed’s preferred gauge for inflation, narrowed to an annualized 1.4% from 2.1% in the third-quarter. Despite the improved outlook for growth, the disinflationary environment may push the Fed to retain its highly accommodative policy stance for an extended period of time as it struggles to achieve the 2% target for inflation. The market reaction following the better-than-expected figures was short-lived as EUR/USD climbed back above the 1.2425 region to end the day at 1.2473.

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